American Bankers Insurance Group, Inc. Announces Settlement of Non-File Insurance Class Action Litigation.MIAMI--(BUSINESS WIRE)--Nov. 16, 1998--American Bankers Insurance Group, Inc. (NYSE NYSE See: New York Stock Exchange :ABI Abi (ā`bī) [short for Abijah], in the Bible, King Hezekiah's mother. (Application Binary Interface) A specification for a specific hardware platform combined with the operating system. ) today announced that it has reached an agreement, subject to court approval, to settle pending federal class action litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. associated with the Company's non-filing insurance product. Non-filing insurance is an insurance product which lenders may purchase in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. filing a UCC An abbreviation for the Uniform Commercial Code. financing statement covering the collateral of their borrowers. In the litigation, the Company and several of its subsidiaries were named as co-defendants with numerous finance companies, jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. and furniture retailers, and other insurance companies in purported pur·port·ed adj. Assumed to be such; supposed: the purported author of the story. pur·port  ed·ly adv. nationwide class actions which were consolidated
in the United States District Court for the Middle District of Alabama The United States District Court for the Middle District of Alabama is the Federal district court whose jurisdiction comprises the following counties: Autauga, Barbour, Bullock, Butler, Chambers, Chilton, Coffee, Coosa, Covington, Crenshaw, Dale, Elmore, Geneva, Henry, Houston, .
This litigation has been disclosed in the Company's prior financial
statements, and was the Company's most significant class action
litigation exposure. The Company's contribution to the settlement
and related expenses will be approximately $17 million. Further, the
settlement defines how non-file insurance will be used in the future.As, the settlement was reached subsequent to the Company's earnings release, but prior to the issuance of the Company's third quarter financial statements, net income for the three and nine month periods ending September September: see month. 30, 1998, have been changed to reflect the financial terms of the settlement. The Company has recorded an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for this settlement, including the expected expenses, of approximately $17 million, pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta . The impact, net of income taxes, was a reduction to earnings of approximately $11 million. As a result of this adjustment, net income for the three month period ended September 30, 1998, has been reduced from $27.3 million or $0.60 per basic share to net income of $16.3 million or $0.34 per basic share. The revision of the Company's previously published earnings is strictly a consequence of the timing of this settlement. As the Company's third quarter 10Q is being filed today with the SEC and the most critical details were not worked out until the settlement agreement was signed on November 12, 1998, the Company under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting is required to accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. this settlement in the third quarter's financial statements and 10Q being filed today with the SEC. As previously reported, on October 13, 1998, the Company received a $400 million payment in connection with the termination of the Cendant transaction which will be reflected in the Company's fourth quarter financial statements. American Bankers American Banker is a daily newspaper covering the financial services industry. Founded in 1835 and based in New York, American Banker's 70 reporters and editors in six cities monitor developments and breaking news affecting banks. Insurance Group, Inc. (ABIG ABIG American Bankers Insurance Group ABIG Access Bus Industry Group ) concentrates on marketing affordable, specialty insurance products and services through financial institutions, retailers and other entities offering consumer financing as a regular part of their business. ABIG, through its insurance subsidiaries, operates in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada, the Caribbean, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the United Kingdom. -0-
The comparative consolidated results are as follows:
(in thousands)
Quarter Ended Nine Months Ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
Income (loss) before
realized investment
gains and income
taxes $ 14,738 $ 37,570 $ (23,183) $ 110,021
Realized investment
gains 6,191 4,065 15,205 9,099
----- ----- ----- -----
Income (loss) before
income taxes 20,929 41,635 (7,978) 119,120
Income tax expense
(benefit) 4,643 11,796 (11,753) 34,244
----- ----- ----- -----
Net income $ 16,286 $ 29,839 $ 3,775 $ 84,876
========== ========== ========== ==========
The following is a breakdown of operating income and realized
investment gains, net of taxes: (in thousands except per common share
data.)
Quarter Ended Nine Months Ended
September 30 September 30
------------ ------------
Basic: 1998 1997 1998 1997
----- ---- ---- ---- ----
Net operating income
(loss) $ 10,712 $ 25,400 $ (11,008) $ 73,570
Net realized
investment gains 4,025 2,642 9,883 5,915
----- ----- ----- -----
Adjusted net income
(loss) 14,737 28,042 (1,125) 79,485
Dividends on preferred
stock 1,549 1,797 4,900 5,391
----- ----- ----- -----
Net Income as
reported $ 16,286 $ 29,839 $ 3,775 $ 84,876
========== ========== ========== =========
Basic per share data:
Operating income
(loss) $ 0.25 $ 0.61 $ (.26) $ 1.78
Net realized
investment gains .09 .06 .23 .14
----- ----- ----- -----
Adjusted net
income (loss) $ 0.34 $ 0.67 $ (.03) $ 1.92
=========== ========== ========= =========
Weighted average
shares
outstanding 42,829 41,654 42,491 41,968
=========== ========== ========= =========
Diluted:
Net operating
income (loss) 12,261 $ 27,256 $ 6,093 $ 79,134
Net realized
investment
gains 4,025 2,642 9,883 5,915
----- ----- ----- -----
Net income 16,286 29,898 3,790 85,049
Interest on
convertible
debentures 0 (59) (15) (173)
----- ----- ----- -----
Net income as
reported $ 16,286 $ 29,839 $ 3,775 84,876
========== ========== ========= =========
Diluted per share data:
Net operating
income $ (a) $ .58 $ (a) $ 1.69
Net realized
investment gains (a) $ .05 $ (a) $ .12
----- ----- ----- -----
*
Net Income $ (a) $ 0.63 $ (a) $ 1.81
========== ========== ========= =========
Weighted average
share outstanding 46,986 47,144 46,959 46,886
========== ========== ========= =========
(a) Anti-dilutive
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